Eerie silence reigns in US wire rod market

Halloween comes at an appropriate time to the North American wire rod market. The market is dead silent, as wire demand is sagging, and wire drawers are in inventory reduction mode, not wanting to commit themselves to domestic or import rod purchases. One importer described the market as “scary” to SteelOrbis. Domestic rod producers are experiencing extremely weak business. Although there have been no announced price decreases in the US domestic wire rod market since last week, big-tonnage buyers are able to negotiate just about any price they ask for, sources say. Some of the wire rod mills are responding to the slow market by cutting output - Rocky Mountain Steel and Mittal Georgetown are reportedly among the domestic mills that are scaling back production in order to help stabilize the market. Still, even with disciplined production, it does not look like the gloomy market situation is about to turn around any time soon. The domestic pricing trend is still down. Most domestic low carbon wire rod offers still range from $25.50 cwt. to $26.50 cwt. ($562 /mt to $584 /mt or $510 /nt to $530 /nt) ex-mill. High carbon prices fall into a range of $28.50 cwt. to $30.50 cwt. ($628 /mt to $672 /mt or $570 /nt to $610 /nt) ex-mill. The pricing trend for import wire rod is now slightly down. Going deeper in to the fourth quarter, there is talk in the market that Chinese rod prices in their home market will soften, which means that Chinese mills may soon start lowering their export prices for the US. Also, there is speculation that the export tax on Chinese billets may give a boost to wire rod production, providing an additional incentive to export wire rods. Moreover, previously quoted exuberant ocean freight rates from Asia are now settling to more subdued levels. Right now, there are hardly any new import bookings on the market because hardly any one is buying. The few offers that are on the market still range on average from $23.50 cwt. to $24.50 cwt. ($518 /mt to $540 /mt or $470 /nt to $490 /nt) FOB, loaded-truck, in US Gulf ports for mesh grade. Import drawing quality rod prices still range from $25.00 cwt. to $26.00 cwt. ($551 /mt to $573 /mt or $500 /nt to $520 /nt) FOB, loaded-truck, in US Gulf ports. Preliminary census data from the US Steel Import Monitor shows that during the month of September, the following countries exported the highest tonnages of wire rod to the US: China at 107,189 mt, Turkey at 24,495 mt, Canada at 22,769 mt, Brazil at 12,586 mt, and Japan at 11,899 mt.